STREET POLL: Where Will Rates Be Next Year?

On March 11th we wrote, "Lots of headlines to digest lately. What region is the market focused on again? North Africa, the Middle East, Spain, Portugal, Greece, China, Japan, the U.S.? What trade is the market working right now? Long Oil? Short Stocks? Long Gold? Short Bonds? Short the Dollar? Wait. What about economic fundamentals? Expansion? Contraction? Inflation? Deflation? Reflation? Rate Hike? QEIII? Certainly enough to make you wonder what's priced into asset valuations and what isn't priced into asset valuations"

Although we've experienced much price volatility lately, it's been a slow meandering move higher, mostly led by technicals and a lack of directional resistance. A real snoozer from where we sit. Lots of paper trading. It seems like continually developing events around the world have led to a new level of exhaustion. Markets seem stuck in "Wait and See" mode as a result....it's a trader's world, we're just living in it. From that perspective, we should be wondering where the traders think yields will be in 3-months to a year.

According to a Reuters poll of dealers, bankers, brokers.....not too many folks share our outlook for another run lower in rates. 

It looks like 2011 is going to be one giant range trade. Such a wide variety of expectations....

A 10yr note yield at 4.00% would put "Best Execution" C30 mortgage rates between 5.375% and 5.625%

HERE are the results of the last poll we posted.